Facor Alloys : Turn Around Story

Name : Facor Alloys
BSE : 532656
CMP: Rs. 5.53 (FV Rs.1)
Target : Rs. 13 (Period 6 Months)


FACOR was founded in 1956 which put the new industrial town of Shreeramnagar on the world map of Ferro Alloys.

Shreeramnagar, situated about 100 kms North of Vishakapatnam fort, on the east coast of India, became the first major producer of bulk Ferro Alloys in the country. It began with a production capacity of 45,000 tonnes per annum that met the requirement of the growing iron and steel industry in India.


Then in 1968, two more furnaces were added for Low Carbon & High Carbon Ferro Chrome products and in 1981 a 16 MVA furnace was put up for production of Ferro Silicon or additional quantities of High Carbon Ferro Chrome.

In the meanwhile, FACOR was keenly developing indigeneous technology, through its research and development department, to utilise low grade chrome ores, from its own mining leases to produce Charge Chrome. Based on its in-house technology adopted and proved to an experts committee of Government of India, in the 7.5 MVA plant at Shreeramnagar, it set up a 100% Export Oriented 50,000 tonnes per annum Charge Chrome Plant in 1983 at DP Nagar, Randia, in Bhadrak District in Orissa. Having established this base FACOR decided to add value to its own output by getting into forward integration. A sophisticated steel plant was set up at Nagpur to produce Carbon Steel, Manganese Steel, Alloy Steel and Stainless Steel.

In order to meet part of their power requirements FACOR has established two power plants of capacity 3x10 MW and 2x10 MW at Shreeramnagar and Randia respectively in 1989-90. These diesel power plants are supplied by MAN B&W Germany and are operating with heavy fuel oil (Furnace Oil or LSHS).

This of course, is not the only high point of achievement of the R&D Department. The department has for long enjoyed the recognition of the Department of Science and Technology, Council of Scientific and Industrial Research, Ministry of Steel for having developed and established processes for:

Beneficiation of low grade chrome ore
* Agglomeration of ore fines and concentrates by way of briquetting and sintering
* Production of intermediate Carbon Ferro Chrome
* Production of Magnesium Ferro Silicon
* Metal Recovery Plant of 20 T/Hr capacity established in 1994 to recover metal entrapped in slag


Technical Chart:



News Item 1:
New Delhi, Aug 12 (UNI) Ferro Alloys Corporation (FACOR) Group has said it is planning to invest Rs 2,500 crore in a phased manner by 2010 on a major expansion plan.

The expansion plan includes setting up a stainless steel plant of 0.5 million tonnes per annum and a coal-based power plant of 250 MW, as may be decided by the company later.
The company is negotiating for entering into a fresh joint venture agreement with a foreign company for exploration and mining of platinum group of elements in the company's mine in Orissa, said a statement.

For the above purpose, the Group companies are taking shareholders approval in the ensuing AGM for altering objects clause of Memorandum of Association/commencement of new business as well as for making investments.

The above proposals are currently on the Planning Board and may take time, it added.

FACOR Group of companies consist of Ferro Alloys Corporation Ltd (FACOR), FACOR Alloys Ltd (FAL), FACOR Steels Ltd (FSL) and FACOR Power Ltd (FPL).

News Item 2:
Facor Alloys Ltd has informed BSE that the members of the Company have passed the following Resolutions by way of Postal Ballot, with requisite majority:

1. Ordinary Resolution under Section 293(1)(a) of the Companies Act, 1956 for:

a) mortgaging and / or charging the whole or substantially the whole of the Company's any one or more undertaking(s) to or in favour of all or any of the Financial Institution(s) or Bank(s) for securing Loans or Financial Assistance / Working Capital Facilities granted or to be granted.

b) selling the Power Plant Unit comprising of 30 MW Diesel based Power Plant consisting of 3 nos D.G. Sets of 10 MW each located at Garividi, Dist. Vizianagaram, Andhra Pradesh on "as is where is basis" to M/s. Volta Impex Pvt Ltd, Hyderabad for a total consideration of Rs 12.20 crores subject to the receipt of any consents, approvals and permissions as may be required.

2. Special Resolution under Section 17 of the Companies Act, 1956 for alteration of the Objects Clause of Memorandum of Association of the Company by adding new sub-clauses 8A, 8B, 8C, 8D, 8E & 8F after the existing sub-clause 8 of other objects.

3. Special Resolution under Section 372-A of the Companies Act, 1956 for giving guarantees and / or to continue the guarantees already given to the consortium banks for Term Loans and other fund based and non-fund based Working Capital Facilities availed / to be availed by Ferro Alloys Corpn Ltd. (FACOR) and Facor Steels Ltd (FSL) other group Companies subject to a maximum limit of Rs 150 crores in respect of FACOR and Rs 100 crores in respect of FSL respectively.